Gold futures and shares decline

NEW YORK (CBS.MW) -- Shares of most metals companies closed sharply lower Thursday and gold futures prices followed suit as uncertainty over the effects of the latest anthrax cases on the U.S. economy loomed.

"Conditions are still relatively quiet in the gold market, with some position squaring developing, but the overall tone remains cautious," analysts at the World Gold Council wrote in a daily research note.

A staffer in CBS News anchor Dan Rather's office has tested positive for the skin version of anthrax. This makes the third New York-based news network to be hit by anthrax over the past week. See full story.

Investors have been concerned that the anthrax attacks will further postpone economic recovery, noted GNI Research analyst Lawrence Eagles.

On Thursday, the Philadelphia Gold and Silver Index
XAU, +1.49%
settled at 54.07, down 3.8 percent.

Gold futures drop back

Over on the futures market, gold for December delivery closed at $279.80 an ounce, down $4.80. The contract settled at its lowest level since the Sept. 11 terrorist attacks on the East Coast.

Volume and open interest have both been declining, said Erik Gebhard, an analyst at Altavest.com. Basically, the technical charts "are saying that gold demand is weak, likely due to struggling economic picture around the globe."

"Since early September, the dollar has rallied and for the last month, so have equities," he said. "Therefore, the gold market has been left without much to go on."

As of late Wednesday, Comex gold warehouse stocks were unchanged at 1.1 million ounces. Silver inventories were up 587,380 to 103.5 million ounces.

In other metals trading, December silver fell by 11.7 cents to $4.263 an ounce on the heels of gold's losses.

January platinum eased $7.60 to $417.30 an ounce and December palladium fell $5.40 to $327.60 an ounce.

December copper closed down 0.7 cent at 63.2 cents a pound. Comex stocks, by late Wednesday, were up 646 short tons to reach 206,094.

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